A songwriter`s publishing house must accept that the label distributes its music in public. This is done by a mechanical license issued to the label. As of July 2018, all government laws and regulations relating to the granting of mechanical licences are included in Section 115 of the Copyright Act. The content in this section is more than a century old and is far ahead of digital listening services. However, a bill called the Music Modernization Act attempts to amend and update music licensing processes, including Section 115. At the time of this letter, the following amendments were proposed with respect to the granting of mechanical licenses: If an independent music publisher does not use HFA for mechanical royalties, the record company pays them directly to music publishers. This will be every 4 to 8 months of late payment, in addition to the 11.5% HFA commission. For example, Puff Daddy wants to try the opening reef of “Every Breath You Take” by The Police. He contacted the copyright holder of the underlying musical work and obtained a mechanical license to use The Police`s song in whole or in part in its composition. He now has the right to reproduce all or part of “Every Breath You Take” in his new song.
However, he can`t buy The Police`s biggest hits, bring the iTunes CD (or MP3) to the studio, trace the phonorecorde and try the reef in his new song. In order to taste the police`s Phono album, Puff Daddy must obtain both a mechanical license from the copyright holder of the underlying musical work and a license from the Phono protocol copyright holder, from whom he copies the sample. It is free to hire musicians to reproduce the sound of the font, but it cannot copy from any Phono disc with a single mechanical license. However, mechanical royalties are often reduced for artists/composers who sign a traditional agreement on the record label. A common provision of the record contract, which reduces the amount of mechanical royalties paid to the artist/songwriter, is called the Controlled Composition Clause. On a multi-platinum record, this 25% reduction can easily make a six-figure difference. Some record contracts may also say that the advance paid to the artist by the record company implies an advance of reduced mechanical royalties via Controlled Composition.